"Why should I have a Will?"
I am frequently asked this question. While no one is required to have a Will, there are many reasons it is advisable to have one in place.
But first, let's back up. What exactly does a Will do? The main purpose of a Will is to direct the ownership of your certain property after death. It can also be used to nominate guardians for your minor or incapacitated children, and describe your wishes for the disposition of your remains. Without a Will, your property would still pass to your heirs at law, your child would still have a guardian, and someone would still decide what should happen with your remains. However, you would have no enforceable input whatsoever into these important decisions.
A Will directs the disposition of probate property, or property passing inside of your probate estate. Over the last couple decades or so, "probate" has been condemned as the black sheep of estate planning work. Many people feel compelled to do everything possible to avoid it, and yet the process itself is fairly predictable, and does not have to be the insurmountable obstacle people fear. There is even a simple version for small estates. Some people believe that by not having a Will, they will automatically avoid probate. This is simply not true! If a decedent owns any probate property at the time of death, clearing title to transfer the property will still require Court involvement.
One situation which warrants having a Will is when there are children involved. Nominating legal guardians for minor, legally incapacitated or disabled children is a good way to lay the groundwork for what might happen after your death. As part of creating the Will, clients may need to speak with the family members and friends they wish to nominate as guardians to ensure that the intended guardians are not only able to take on such a task, but would be willing to do so. Sometimes clients are surprised by their conversations, but once armed with the relevant information, are able to make or change their nominations accordingly. Without a Will, children will still end up with guardians, but the Court's choice may not necessarily be the same as your own choice, as you failed to make your wishes known to the Court through a Will.
Nominating guardians is not the only benefit to creating a Will when children are involved. Since minors cannot own property, it is often held in trust for their benefit until they reach a certain age. Without a Will, this age is 18. I have never had clients who wanted their children to receive an entire inheritance on their eighteenth birthday! At 18, their children have had their driver's licenses for less than two years, and are cramming for 12th grade finals while trying to get a summer job before trekking off to college. Generally, my clients have felt that this is not the point when their children should suddenly become responsible for managing hundreds of thousands, or even millions of dollars. A Will can contain trust provisions which will direct the management and investment of the estate funds well beyond the beneficiaries' 18th birthday. This will ensure that the children are provided for, but are not burdened by the responsibility of owning and managing the assets at such a young age.
Another situation where I frequently advise clients to create Wills is when they own real estate. The type of title they hold to the real estate will determine how the property will pass upon their deaths, and whether or not it would be included as part of their probate estate. If my clients are married, the issue is usually not what would happen to the property if one of them dies, since the survivor would typically assume full ownership, but rather the question lies in the disposition of the property upon both of their deaths.
For personal property, I find clients generally tend to bequeath their belongings along much more personal sentiments than bank accounts or real estate. Clients often ask if it is sufficient to stick pieces of paper on their belongings with the names of the intended recipients. The answer is no, this is not a legally sufficient manner to transfer property. Notes may fall off or fade in time, and may be removed or replaced by others. If there are precious items you wish particular individuals to receive after your death, a Will is the only means to make such bequests legally enforceable.
Clients also usually use Wills to express their wishes for the disposition of their remains. Sometimes they also include language regarding their desires for any funeral or memorial service. Laying out specific wishes in a Will removes the burden of choosing the type of service from the survivors, who may feel overwhelmed at the time of your death.
Wills can also be used to maximize estate tax advantages. Discussions about estate taxes are generally accompanied by discussions about the lifetime gift tax exclusion and generation-skipping tax, and the ways lifetime and charitable giving might play into enhancing the overall estate plan. In recent years, I have found that while clients still care about avoiding or delaying taxes when possible, they are usually more interested in making sure particular relatives and family heirlooms are taken care of in specific ways. This trend can probably be attributed at least in part to the increased federal estate tax exclusion and portability of the Unified Credit, which for moderately-sized estates removed the emphasis on tax avoidance. In Massachusetts, the estate tax filing threshhold remains at $1 million per person, so there is definitely still some motivation for tax planning.
Estate planning also becomes important in non-traditional, same-sex, or blended families, where one spouse may have children from a prior relationship that will be included in the parent's estate plan but not the step-parent's estate plan. This typically occurs when the step-children are not legally adopted by the step-parent. Unmarried couples need to consider in their estate plans that they cannot utilize the 100% federal spousal exclusion in transferring property to each other, and same-sex couples, even when married, are not currently able to enjoy the same federal tax benefits as heterosexual couples, and need to plan accordingly. Creative estate planning options should be considered in these situations.
Apart from solidifying the choices already discussed in this article, I think the main benefit to having a Will is the peace of mind it creates in knowing that these hard decisions are already made in a thoughtful and thorough manner, and that surviving family and friends will not be burdened by having to make these decisions themselves. The Will should answer any questions the survivors may have about your estate, your children's guardians, management of trust assets, and disposition of remains, which will eliminate or minimize the confusion or disputes which often arise without a Will.